The Impact of Baby Loans on the Real Estate Market
Of all the elements of the action package, the greatest interest is in the Baby Waiting Support. This is not surprising, since families can get an interest-free loan if they have a child within 5 years. An additional benefit is that after the birth of the child, the couple may request a suspension of the repayment of the discounted loan for 3 years.
When the second child is born, 30% of the outstanding loan capital will be released. And when the third baby is born, the entire outstanding debt is released, so the loan becomes state aid.
Baby Waiting Loan
Another benefit of the Baby Waiting Loan is that it is freely usable for anything and does not require real estate coverage. Contrary to GFIC, in the case of a Baby Waiting Grant, it is not necessary to make a statement on the number of children accepted at the time of application, but when the child or children are born, the amount of support will increase.
Because Baby Waiting Support can only be applied for once, it is worth discussing the goals you want to achieve with the help of a loan broker to help you make the most of your Baby Waiting loan options. Considering that in order to achieve a smaller goal, let’s say you would rather use a personal loan and ask for Baby Waiting Support for a larger investment.
In addition to the statutory criteria for Baby Loans, each credit institution will decide on its own internal policies. to whom they provide support, so it’s worth hiring a professional who is familiar with banks’ internal regulations.
The still popular GFIC (family home improvement discount) is made even more favorable in the new action plan. Under the previous regulations, families with three children received an additional non-refundable subsidy of HUF 10 million in addition to the 3% fixed-rate loan when buying a new home. The new GFIC rules provide many additional benefits for families with 2 children , and the 10 million HUF interest-subsidized loan is available for 2 children. A further relief is that when buying a newly built property, existing children are included in the number of children considered. There is also a non-refundable subsidy in addition to the discounted loan, in the case of newly built real estate HUF 2.6 million for two children and HUF 1.43 million in the case of used real estate
Families with 3 children (including a committed child) can apply for a 3% interest-subsidized loan of HUF 15 million. In addition to the discounted loan, there is a non-refundable subsidy of HUF 10 million for the purchase of new real estate and HUF 2.2 million for the purchase of used real estate.
The purpose of the village GFIC is primarily to facilitate the creation of homes for families living in small settlements or young people who are planning to start a family. Families living in settlements with fewer than 5,000 inhabitants or small settlements whose population declined between 2003 and 2018 may apply for this favorable support.
The village’s GFIC will be able to claim the HUF 2.6 million subsidy for the two children , but not only for the purchase of the apartment, but also for the renovation / extension and modernization. After three children , the purchase or renovation / extension and upgrade can be claimed for 10 million HUF . However, here too, the child allowance amounts to 600 thousand HUF.
In addition to the grant, a village GFIC loan can also be applied for in the amount of HUF 10 million for the purchase and modernization and / or extension of a used home for two children. For three children this amount is HUF 15 million.
If you want to get public support for a small town on the list, you can opt for “normal” GFIC, if it is more favorable, but you can also use rural GFIC support. It is possible to have a child even with village GFIC support.
Real estate market effects
Experts expect further increases in the housing market due to rising construction costs, rising VAT and new subsidies. With the spread of low-interest housing loans, demand in the property market may continue to grow. Therefore, it is worth taking action as soon as possible. Under the current market conditions, with the right combination of subsidies and available loans, it is still possible to buy a new or used home / apartment, but if the price increases further, you will not be able to buy a new home, even with increased opportunities. At the same time, there is some hope that the new government securities will be released, as its introduction is expected to reduce the proportion of investors in the real estate market, which may curb further price increases.
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